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Carveout

Carve out from a block of wood

90 Second Lesson: What is a “Professional Fee Carve-Out” in Chapter 11?

QUESTION:   A commercial banker emailed saying, “We’ve recently had a large asset-based loan default, and the company filed Chapter 11. Our attorney has advised us that we should agree to pay the borrower’s attorneys by letting them get paid from the proceeds of the sale of our collateral. Can this possibly be right?” ANSWER: […]


90 Second Lesson: How is a General Carve-Out Different than a Professional Fee Carve-Out?

Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to info@dailydac.com and we will try to answer it. QUESTION: Last month we explained what a professional fee carve-out is.  That caused a few readers to email and ask: how does a fee carve-out […]


90 Second Lesson: What is a “Professional Fee Carve-Out” in a Chapter 11 case?

Editors’ Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to info@dailydac.com and we will try to answer it. QUESTION: A commercial banker emailed saying, “We’ve recently had a large asset-based loan default and the company filed Chapter 11.  Our attorney has advised […]


Do’s and Don’ts of Gifting in Bankruptcy: When a Court Will Look a Gift Horse in the Mouth  

The gifting doctrine in bankruptcy is not new and often is used to obtain creditor consensus to a debtor’s proposed exit – either through a chapter 11 plan or a 363 sale. A bankruptcy “gift” typically involves a structurally senior class voluntarily giving some of its property or distribution to a structurally junior class of […]


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